IT IS hard to believe that little more than four decades ago China was a global pariah and an economic backwater, a nation that had no formal diplomatic relations with Australia and the US.

Since the communist revolution in 1949, Canberra and Washington in particular believed the free world had ''lost'' an ally and acquired a hostile enemy from the Soviet bloc. Australia still developed a lucrative trade in wool and wheat with the mainland, but, unlike Britain, had supported US policy to ostracise ''Red China'' diplomatically. For more than two decades, the real China was essentially recognised as Taiwan, where Chiang Kai-shek's defeated Nationalists had fled after the civil war.

From July 4-6, 1971, Gough Whitlam led an opposition Labor Party delegation to meet the communist leadership in Beijing; a few days later, from July 9-11, Richard Nixon's envoy, Henry Kissinger, secretly engaged in the same diplomatic ritual. That week marked a turning point in not only US-Australian dealings with the communist state, but China's march to great-power status.

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Billy Griffiths, a 23-year-old writer, takes us through these dramatic events in early July 1971 with skilful ease, weaving history, diplomacy and politics into a complete narrative. If I were to suggest a short, readable introduction to Sino-Australian relations, this book would probably top the list. It is written exceptionally well, with a concision and elegance rare in writing about diplomatic history.

Since Robert Menzies regained power in 1949, the ALP had been in opposition; wedged between Whitlam-type backers of accommodating mainland China, and the anti-communist Democratic Labor Party whose preferences helped keep the Coalition in office until the early '70s. From the outset, Griffiths sides with the China engagers over Menzies, the DLP, former US secretary of state John Foster Dulles and their ''conspiracy theories'' of the ''red menace'', which is plausible enough when you consider the folly of isolating one-fifth of humankind. It's just that one should also recall that a ruthless tyranny prevailed and millions of Chinese were killed by the communist regime or died because of its insane policies. Griffiths, alas, skates over this.

Cracks in the Cold War domestic consensus appeared in the late 1960s. Britain's decision to withdraw its military presence from east of Suez and to retreat into the European Economic Community as well as the newly elected president Richard Nixon's Guam doctrine - which stressed limits to American power - sent cultural shockwaves across the antipodes.

As University of Sydney historian James Curran observes in his excellent chapter in Australia and China at 40, these seismic external shocks rendered Canberra's Cold War policy obsolete in a new multi-polar world. They also catapulted Australia into a crisis of national meaning.

In this environment, it was bold stuff for any leader to set out a new foreign policy agenda that included a rapprochement with the Chinese communists and an ''independent'' foreign policy (left-wing code for snubbing at every turn what Menzies had called ''our great and powerful friends'').

Griffiths points out in riveting detail how Whitlam's privately funded visit culminated in a 105-minute midnight meeting with Zhou Enlai in the Great Hall of the People on July 5. The Labor leader told the Chinese premier that although Australia's security alliance with the US was ''entirely defensive'', he insisted that, as next prime minister, he would open up a new chapter in relations with both China and the US. More comprehensive Asian engagement; and no more all-the-way-with-the-USA sycophancy a la Harold Holt in 1966.

Back home, prime minister William McMahon railed against this ''instant-coffee diplomacy'', warning that ''in no time at all Zhou Enlai had Mr Whitlam on a hook and he played him as a fisherman plays a trout''.

Three days later, on July 15, Nixon announced to the world the news of Kissinger's visit and that he, the president, would also visit China in early 1972 to seek the normalisation of diplomatic relations between the two nations. (McMahon, like the Japanese, Taiwanese and even Nixon's own State Department, had been kept in the dark.)

Now it was Whitlam who had played McMahon as a fisherman plays a trout. That did not stop rising Liberal star Malcolm Fraser charging that Whitlam had ''clearly become the Chinese candidate for the next Australian elections'' and that he was ''a disgrace to Australia''.

Yet Whitlam's election in December 1972 not only ended 23 years of Labor's political wilderness. Taken together with the Nixon-Kissinger initiative, it helped end China's angry isolation from the world.

Fast-forward four decades: China, an economic powerhouse and rising military great power, means different things for the US and Australia. For the former, its main significance is the emergence of a strategic rival. For the latter, it is the opportunity for a rewarding economic relationship. As several contributors to Australia and China at 40 argue, this presents Canberra with a new psychological challenge.

''For the first time in its history, Australia's leading trading partner is not a democracy,'' write Sydney University academics James Reilly and Jingdong Yuan, ''but rather a one-party authoritarian state with a fast-growing economy, a rapidly modernising military and global ambition.''

Compounding this uncertainty is polling data that, according to the Lowy Institute's Fergus Hanson, shows Australians remain profoundly ambivalent over China's rise. That may explain the Gillard government's enhanced military co-operation with Washington, even though Australians recognise that China has become more important than ever for our prosperity.

Yet, as La Trobe University's Nick Bisley suggests, Australia is not faced with a hard, stark choice between China or the US. Instead, our diplomats and political leaders will need to continue playing a diplomatic game, one that will on occasion involve the difficult feat of riding two horses simultaneously.

If that means Canberra ought to send qualified and nuanced messages to both Washington and Beijing over any tensions in the Taiwan Strait or the South China Sea, so be it.

Whitlam would agree.

■ Tom Switzer is a research associate at the United States Studies Centre at the University of Sydney.